Planet IB Ltd.’s 13.5 pounds-a-share offer, or 23 percent
more than the stock’s May 31 close, lacked details on the
“financing resources” as well as information about the
investors, Cairo-based EFG-Hermes said today. The shares rose
0.4 percent to 11.01 at the close of trading in the Egyptian
capital, taking their gains this year to 10 percent.

EFG-Hermes, which operates in countries including Egypt,
Saudi Arabia and the United Arab Emirates, would extend its
reach to Turkey and as far as southeast Asia through the
venture, which still needs regulatory approval. Planet IB Chief
Executive Officer Ahmed El Houssieny may now pursue a hostile
bid if management refuses to allow him to conduct due diligence.

Planet IB is “offering a hefty premium over the current
market prices, which as shareholders we will be willing to look
at,” said Rami Sidani, the Dubai-based head of Middle East and
North Africa investments at Schroder Investment Management,
which owns EFG-Hermes shares. “However, unfortunately the deal
remains quite ambiguous and we still don’t have full certainty
whether the funds are available for a potential bid.”

One-Time Dividend

EFG-Hermes shareholders yesterday backed an agreement that
would give QInvest, a unit of Qatar Islamic Bank, 60 percent of
the venture. EFG-Hermes’s private-equity business and its stake
in Lebanese commercial bank Credit Libanais SAL aren’t part of
the deal. Investors will receive a one-time cash dividend of
about 4 pounds a share, the bank said today.

Planet IB’s offer didn’t provide a commitment that a bid
will be presented after due diligence, EFG-Hermes said.
Shareholders present at yesterday’s vote included Dubai
Financial Group and the Abu Dhabi Investment Authority, the
emirate’s sovereign wealth fund, it said.

“I will not shy away from Egypt’s first hostile
takeover,” El Houssieny said yesterday in a statement to
Bloomberg. “I have done Egypt’s first corporate bond issuance,
Egypt’s first leveraged buyout, Egypt’s first securitization
transaction.”

‘Great Valuation’

EFG-Hermes will have the right to sell its 40 percent stake
to QInvest in the 12 months to 36 months from signing of the
transaction at a price of 1 billion pounds, it said May 8.
QInvest also retains the right to buy its partner’s stake in the
same period at the higher price of $165 million or the “fair
market value at the time of the exercise, subject to a cap.”

QInvest has said it will invest $250 million in the
venture. The units being transferred into the venture with
QInvest were valued at 700.5 million pounds by accounting firm
Grant Thornton, EFG-Hermes said May 30.

“We are getting a great valuation of the investment
banking franchise,” said Schroder’s Sidani. The agreement on
the remaining 40 percent stake in the joint venture will help
shareholders “capture part of the upside,” he said, should
investment banking activities in Egypt rebound from a slump that
followed last year’s uprising.

Debt Funding

Planet IB said May 31 it secured $650 million in debt and
“substantial equity commitments” from domestic, regional and
international investors, including a member of the ruling family
of Sharjah in the United Arab Emirates. El Houssieny, former
managing director at Cairo-based private-equity firm Citadel
Capital SAE, said the offer hinged on EFG-Hermes’s management
allowing his company to conduct due diligence.

“If EFG-Hermes is serious about entertaining a tender
offer from Planet IB, it must immediately postpone the execution
of the alternative transaction,” Planet IB said in yesterday’s
statement.

The agreement with QInvest requires regulatory approval.
Ashraf El Sharkawy, chairman of the Egyptian Financial
Supervisory Authority, wasn’t available for comment when
contacted by Bloomberg News in Cairo today.

Planet IB sent a letter today to the markets regulator,
Nasr El Din El Houssieny, a director at the company, said by
phone. He declined to elaborate.

EFG-Hermes’ co-chief executive officers were referred to
trial in Egypt May 30, charged with illicit gains related to the
2007 sale of El Watany Bank of Egypt. EFG-Hermes has denied the
charges, which centered on the lack of disclosure of trading
activities and involved seven others including Alaa and Gamal Mubarak, the sons of former president Hosni Mubarak.